Prime retail rents jump as sector becomes latest to feel shortage of space
Prime rents for shops on Henry Street in central Dublin have increased 14pc on the past year, as the retail market continues to show signs of improvement.
Property agent CBRE say the outlook for the retail sector is steadily getting better, and that is feeding through to demand for shops in strong locations around the country.
CBRE said the level of companies looking to rent more space has been getting consistently stronger in the perceived best retail locations across Ireland over the last six months.
“This trend first materialised in Dublin but during the last year has become evident in other prime high streets and shopping centres around the country,” CBRE said.
Occupier demand is coming from both indigenous occupiers and new entrants to the market although CBRE admitted that the number of retailers looking to expand in provincial locations is not as diverse as those focusing on securing stores in Dublin.
Given that increase in demand, it seems retail has become the latest sector where there is a coming shortage of suitable space.
CBRE said the lack of availability of retail units on prime high streets, shopping centres and retail schemes throughout the country is now the biggest challenge facing the sector.
This has led to further increases in prime retail rents in key locations over recent months.
Prime Zone A rents on Dublin’s Grafton Street – which first began to rise in 2015 – have increased 4pc year-on-year to €5,700 per square metre.
On Henry Street, prime zone A rents increased for the first time since 2013 in Q1 2016, to €4,000 per square metre – an annual increase of some 14.3pc.
CBRE Ireland’s senior director for office agency, Bernadine Hogan, said it was “encouraging to see improving occupancy on many of the high streets, demonstrating the extent to which Ireland’s retail recovery is now starting to filter down to locations outside of the capital”.
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